Bonuses for Surpluses, Another Federal Pay Comparison, and More

A weekly roundup of pay and benefits news.

Sen. Rand Paul, R-Ky., introduced a bill last week that would award bonuses to federal employees that identify surplus funds in their agencies’ budgets.

The Bonuses for Cost-Cutters Act (S. 1830) would allow agency inspectors general to authorize bonuses in instances where workers identify unneeded or surplus funds. Paul said the bill is aimed at combatting spending binges at the end of the federal budget calendar, when he said agencies adopt a “use it or lose it” mentality.

“Reining in and controlling end-of-the-year spending binges should be a bipartisan priority,” Paul said at a hearing last week. “Hopefully our hearing today will renew interest on both sides of the aisle to address accelerated, wasteful spending at the end of the fiscal year.”

Under the bill, a maximum of 10 percent of identified savings could go to the federal employee responsible for identifying the surplus, while the remainder would go toward deficit reduction. Bonuses could not be awarded to employees at the top level of the Executive Schedule pay system, to agency heads or to voting members of independent boards.

But Heather Krause, director of strategic issues at the Government Accountability Office, testified that agencies’ back-loaded spending tendencies are in part a result of budget uncertainty and congressional brinkmanship. Krause said the imbalance between beginning- and end-of-year spending may not be strictly overspending at the end of the fiscal year, but underspending at the start, if Congress has not approved a budget.

“While [continuing resolutions] allow agencies to continue operations until their final appropriations are determined, in 2009 we reported that agencies changed their spending patterns during a CR period,” Krause said. “For example, agencies limit spending early in the year because their final funding may be less than anticipated. They also tend to delay hiring or contracts during a CR.”

Krause said the federal procurement process also can lead to higher spending at the end of the fiscal year, especially if the budget is approved late in the fiscal year.

“Longer CRs in particular can contribute to agencies rushing to obligate funds at the end of the year,” she said. “Following a lengthy CR, they can end up spending funds on lower priority items that can be procured quickly if they don’t have enough time to spend funds on higher priority needs.”

Elsewhere in federal compensation, the Cato Institute, a libertarian think tank, last week released a report finding that federal employees earned 80 percent more on average than private sector workers in 2016. Using data from the Bureau of Economic Analysis, the average total compensation for federal employees increased 2.5 percent last year, compared with 1.2 percent for private sector workers.

But critics argue that the Cato Institute’s methodology is flawed, at best. The report does not take into account differences in industry and occupations, and it ignores level of education, demographics or location. Howard Risher, a consultant who focuses on pay and performance in the public sector, described Cato’s data as “useless.” He wrote:

[The report] ignores the vast differences in pay across industry sectors: Employees working in the securities and investments sector averaged $219,414. In oil and gas extraction the average was $164,811. At the other extreme, the average pay of the 9 million workers in food services was $26,294. For the 13.8 million workers in retail it was $35,880; in farming, the average was $36,893. Consider that the average pay for those working in computers and system design was $115,393—that helps explain the government’s problems hiring cybersecurity specialists. And that’s the average pay—if you want the best and brightest, expect to pay more.

Meanwhile, the federal government’s Combined Federal Campaign, an annual charity fundraising effort for federal employees, will launch Monday, and will run until Jan. 12, 2018. To mark the occasion and boost awareness of the effort, Office of Personnel Management acting Director Kathleen McGettigan and the Combined Federal Campaign of the National Capital Area held a kick-off event in Washington, D.C., Monday.

At the event, officials highlighted some of the changes to the CFC this year, including the ability for feds to make non-monetary pledges to volunteer time at CFC charities, and the opportunity for federal retirees to make contributions through their annuities.

The campaign has seen decreases in donations each year since 2009. Last year, the CFC saw $167 million in giving, down from $178 million in 2015.